So, with about a month to go before year-end, what do the hard
data tell us about where we are in the business cycle? Reviewing
the indicators used to officially decide U.S. recession dates, it
looks like the recession began around July 2012. This is because,
in retrospect, three of those four coincident indicators – the
broad measures of production, income, employment and sales – saw
their high points in July (vertical red line in chart), with only
employment still rising.

Here's the
chart marking the turn in those three indicators.
Achuthan calls it the "Tell-Tale"
chart:

But if we’re in recession, and the business cycle peak was in
July, how could employment be higher three months later?
Actually, this was also true in three of the last seven
recessions – and in the severe ’73-’75 recession, job
growth stayed positive eight months into the recession. Thus,
positive jobs growth isn’t inconsistent with the early months of
recession. Of course, all of this data is subject to revision,
but, as we’ve noted before, the ultimate revisions to coincident
indicator data after business cycle peaks tend to be downward.

Going back to the other indicators:

If you look at the size of the simultaneous declines in
industrial production and personal income since July, that
combination has never occurred outside a recessionary context in
over half a century – but it’s occurred in every
recession. This leads us to conclude that we are most likely
already in a recession that began around mid-2012.

"Nobody likes to be the bearer of bad news, but a recession isn't
the end of the world," writes Achuthan. "There have been 47
recessions in the past 222 years and, as before, we’ll see
renewed growth after the 48th. Because business cycles are part
and parcel of how all market economies operate, that’s about as
close to a sure thing as it gets."